Acoma, Inc., has determined a standard direct materials cost per unit of $6.60 (2 feet × $3.30 per foot). Last month, Acoma purchased and used 4,360 feet of direct materials for which it paid $13,952. The company produced and sold 2,050 units during the month. Calculate the direct materials price, quantity, and spending variances
Direct materials price variances = (Actual unit Price of DM - Standard unit Price of DM ) * Actual quantity of DM used
= ($3.20 - $3.30 ) * 4,360 feet = $436 Favorable
Direct materials quantity variances = (Actual quantity of DM used - Standard quantity of DM allowed) * Standard unit Price of DM
= (4,360 feet - 4,100 feet ) * $3.30 = $858 Unfavorable
Direct materials spending variances = Direct materials price variances + Direct materials quantity variances
= $436 Favorable + $858 Unfavorable = $422 Unfavorable
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